TPP in Real Life: Subaru’s Indiana Business Booms in an Interconnected Global Economy

Subaru of Indiana Automotive, Inc. (SIA) first broke ground in Lafayette, Indiana more than 29 years ago and is the home of Subaru’s North American production. Models built at SIA’s Lafayette, Ind., plant include the Subaru Legacy and Outback. Later this year, production of the Impreza will be moved to the Lafayette facility from Japan, where SIA’s parent company, Fuji Heavy Industries Ltd. (FHI), is headquartered. Even more exciting, an as-yet-unnamed three-row crossover vehicle will be added at SIA in 2018.

Subaru of Indiana Automotive Facility in Lafayette, Indiana. Photo Courtesy: SIA

Subaru of Indiana automotive facility in Lafayette, Ind. Photo Courtesy: SIA

SIA has seen rapid growth in its Indiana vehicle manufacturing in recent years, with production expected to exceed 340,000 vehicles in 2016, an increase of nearly 40,000 vehicles compared to the prior year. To meet and accelerate this rapid growth, SIA has invested more than $1.3 billion over the past four years to prepare for Impreza production and expand its Lafayette facility, including expanding capacity in its engine and body shops and building a second paint shop.

Subaru Impreza Manufactured in Lafayette, Indiana Starting in November. Photo Courtesy: SIA

Subaru Impreza will be manufactured in Lafayette, Ind., starting in November. Photo Courtesy: SIA

SIA’s Lafayette facility employs more than 5,400 associates, and the company has added more than 1,300 associates in the past year to support the production of new models and growth. These job increases in turn support the broader Lafayette and Indiana economy. New jobs created by SIA have a multiplier of 11.4, meaning that for every job created by SIA, more than 11 other jobs are created in other Indiana businesses, according to 2010 estimates by the Center for Automotive Research.

As an automaker operating in the global economy, free and fair trade is essential to SIA’s operations. In the past, SIA has exported vehicles to more than 52 countries in a single year. During the past five years, nearly 62,000 vehicles built at SIA have been exported to other countries, including more than 53,000 vehicles shipped to Canada. Due to the high demand for the Legacy and Outback in the United States, SIA currently only exports to two other countriesMexico and Colombiaplus Puerto Rico. However, with expansion and new models, SIA exports are expected to grow.

According to SIA Senior Executive Vice President Tom Easterday, “SIA strongly supports efforts to establish free and fair trade between the United States and its most significant trading partners, including through agreements such as the TPP. As our track record demonstrates, SIA’s exportation of vehicles to global markets clearly supports the creation of manufacturing jobs in Indiana, and we’re excited about the further job growth SIA and our suppliers have experienced due to the upcoming start of production of the new Impreza here in the United States.”

Read more from the “TPP in Real Life” series here.

 

Ken Monahan

Ken Monahan

Director for International Trade Policy at National Association of Manufacturers
Ken Monahan is the Director for International Trade Policy at the National Association of Manufacturers (NAM), where he works with NAM member companies to develop and advocate the association’s positions and priorities on trade agreement negotiations, ensure enforcement of existing trade agreement commitments, and other issues including the World Trade Organization (WTO), miscellaneous tariff bills, data flows and privacy, conflict minerals, forced localization, and other bilateral country trade matters (e.g., Colombia, South Korea, and the European Union and its member states). Mr. Monahan has on-the-ground experience negotiating trade agreements, having worked at the U.S. Department of Commerce on the WTO Doha Round negotiations, the U.S.-Korea free trade agreement and other international trade matters.
Ken Monahan

Leave a Reply

Share